Culp, Inc. (NYSE:CULP) Q2 2020 Earnings Conference Call - Final Transcript
Dec 06, 2019 • 11:00 am ET
Kenneth R. Bowling
be significantly up as compared to the fourth quarter of last fiscal year. We anticipate benefits from a return to strong growth for our Class cover business continued improvement and overall industry conditions, and improved operating efficiencies across all product lines. As a result, we expect sales for the second half of this fiscal year to be comparable to sales for the -- as compared to the second half of last fiscal year and operating income and margins for the period are expected to be moderately higher as compared with the second half of the prior year.
In upholstery fabrics segment, we expect third quarter sales and operating income margins to be comparable to the same period last year. Similarly, for the second half of this fiscal year, we also expect sales and operating income and margins to be comparable to the second half of last fiscal year. In our home upholstery segment, we expect third quarter sales to be slightly down compared to the third quarter of last fiscal year, we expect an operating loss for the quarter, but with meaningful improvement as compared to the second quarter. For the fourth quarter, we expect operating performance to be near breakeven as we continue to refine our strategies and focus on higher margin products.
Considering these factors, as well as increased unallocated corporate expenses, due mostly to the comparison of the last year's reversal of accrued incentive compensation costs, the Company expects report pre-tax income for the third quarter in the range of $3.2 million to $3.8 million, excluding any restructuring and related charges or credits and impairment charges, if any.
Pre-tax income from last year's third quarter was $4.3 million which included a net charge of approximately $769,000 in restructuring and related charges and credits and other non-recurring items. Excluding these charges, pre-tax income for the third quarter of last fiscal year with $5 million. The company currently expects our performance for the fourth quarter of this fiscal year to be significantly better than the results achieved in the fourth quarter of last fiscal year.
And as a result, our performance for the second half of this fiscal year is currently expect to be better than results achieved in the prior year period, based on our current budget, capital expenditures for fiscal 2020 are expect to be in the $7.5 million to $8 million range. And depreciation and amortization, you expect to be approximately $9 million for the year. Additionally, given the current outlook, free cash flow for fiscal 2020 is expect to be compared to last year's results, even with an uncertain geopolitical environment. As a reminder, cash flow from operations last year with $13.9 million and free cash flow for the year was $11.5 million. With that, we'll now take your questions.